lex non cogit ad impossibilia - The Legal Chamber

This Supreme Court judgment clarifies the distinction between genuine homebuyers and speculative investors under the Insolvency and Bankruptcy Code, 2016. It holds that allottees with agreements structured for assured returns or buy-back clauses, without a genuine intent to possess the property, are speculative investors. Such investors are barred from initiating Corporate Insolvency Resolution Process under Section 7 of the IBC, as the Code is not a recovery mechanism for speculative investments. Facts Of The Case: This case consolidates four civil appeals concerning the initiation of Corporate Insolvency Resolution Process (CIRP) against real estate developers by individual allottees. The primary appellant, Mansi Brar Fernandes, entered into a Memorandum of Understanding (MoU) with Gay...

The Supreme Court upheld the mandatory nature of Section 12A of the Commercial Courts Act, 2015, requiring pre-institution mediation for commercial suits unless urgent interim relief is sought. However, it clarified that non-compliance before August 20, 2022 (the date of its earlier ruling in Patil Automation) does not warrant plaint rejection—instead, courts may refer parties to mediation while keeping suits in abeyance. The judgment harmonizes procedural rigor with practical enforcement, ensuring mediation’s role in reducing litigation backlog without unduly penalizing past filings. Facts Of The Case: The case arose from a money suit filed by the Union of India against M/s Dhanbad Fuels Pvt. Ltd. in the Commercial Court, Alipore, seeking recovery of ₹8.73 crores as differential freight...

Tag: lex non cogit ad impossibilia

Homebuyer Alert: Supreme Court Clarifies When a Real Estate Investment Becomes “Speculative”

“Can Courts Reject a Plaint for Skipping Mediation? :Supreme Court’s Strict Rule for Commercial Cases”